SHRM-CP / SHRM-SCP Certification Exam: Behavioral Competencies - Business Skills - Critical Evaluation

Behavioral Competency 8—Critical Evaluation
The days of “winging it” are in the past. HR professionals are now able to access vast amounts of data to help them in their decision-making. This area of behavioral competency looks at the extent to which that information is gathered, assessed, and used in the decision-making process.

Four subcompetencies comprise the Critical Evaluation competency. They are defined by SHRM as the following:
- Data advocate Understanding and promoting the important and utility of data
- Data gathering Understanding how to determine data utility and identifying and gathering data to assist and inform with organizational decisions
- Data analysis Analyzing data to evaluate HR initiatives and business challenges
- Evidence-based decision-making Using the results of data analysis to inform and decide the best course of action

Key Concepts
- Survey and assessment tools (e.g., development, administration, validation of surveys and assessments)
- Sources of data (e.g., surveys, interviews, focus groups)
- Basic concepts in statistics (e.g., descriptive statistics, correlation) and measurement (e.g., reliability, validity)
- Interpretation of data and charts
- Using data to support a business case (e.g., interpretation, visualization, graphical representation)

Definition
According to SHRM, Global and Cultural Effectiveness is defined “as the knowledge, skills, abilities, and other characteristics (KSAOs) needed to collect and analyze qualitative and quantitative data and to interpret and promote findings that evaluate HR initiatives and inform business decisions and recommendations.”

Proficiency Indicators for All HR Professionals
Anyone working at the professional level in human resource management is expected to be able to access and interpret information the organization’s leaders need to make accurate decisions about the workforce. What follows are the basics in this area of competency.

Making Sound Decisions
It is a rare circumstance for all information needed to be provided in decision-making. In most situations there is only partial data available. Yet, in spite of that, HR professionals are expected to be able to make good, workable decisions in a timely way. For example, from a long list of possible health insurance vendor programs, HR must select only a handful to present as options for employee enrollment. That requires using whatever might be known about the vendor programs, costs of each program, availability in the geography required, and employee likelihood that each program would be deemed attractive. Only some of that information is available, but the selection of a “short list” must happen anyway. If the decisions are not good, employees will reject some or all of the options. There can be impact on morale and even production levels. Turnover may be impacted whether the decisions made by HR are good or bad. And that is just one example of the importance of sound decisions in the presence of uncertainty.

Assessing the Impact of Laws
Federal and state laws change every year to some degree. When those laws impact HR issues, it is important to determine what specific impact they will have on our organization. When minimum wages increase, there is direct financial impact that can be computed and presented for consideration in the budget planning process. When new benefits are mandated, such as paid sick leave, the costs can be estimated and provided for budget consideration. If there are new requirements placed on nondiscrimination, it may be necessary to train all managers and supervisors in those new legal provisions. If the company decides to move into federal contracting or subcontracting, the financial and recruiting impacts must be estimated.
Federal laws are involved based on the payroll head count of any employer organization that is involved in interstate commerce. When a company hires its first employee, it becomes subject to 53 federal laws governing employment. Hire more than 14 people, and the exposure to legal requirements continues to grow.
HR professionals are expected to monitor these legal developments and forecast how the organization will comply with those requirements.

Transferring Knowledge
What do benefit enrollment, payroll, and discrimination complaints have in common? The answer is they all can involve historical data for proper handling. Using knowledge gained in handling one issue within the HR arena to apply to another (or even several other) issue is both efficient and smart. Equally important is the need to pass along to others the information gained in handling problems in one issue so that it might help in other areas.

Applying Critical Thinking to Information Received from Organizational Stakeholders
Determining what information can be used to support organizational success is dependent on being able to identify what is important from what is not. There are many pieces of information that flow into our realm every day. Most of those data don’t have value in the HR decision-making process. So, you have to sort the valuable from the less valuable.
Of the several phone calls received on a given day,
- One is an alert that the union will be challenging an employee suspension.
- One is an invitation to speak at the local service club luncheon.
- One is a subordinate in the HR department complaining about the lack of hand towels in the restroom.
- One is the boss explaining that the budget estimates are due a week earlier than planned.
- One is describing the progress to date in planning the office holiday party.
- One is from the union president wanting to discuss disciplinary policy.
As each call comes in, your priorities may have to shift. And the information you get from one issue may be helpful in some way when addressing other issues. You have to store, sort, and retrieve each of these pieces of data, applying critical thinking to each in determining what will be helpful and what will not be helpful.

Gathering Critical Information
When a problem has been identified such as “The board of directors has just approved a policy that will give paid sick leave to all employees,” it falls to human resources to figure out how to implement that policy. Implementation begins with gathering data. How many employees are going to be impacted? What has been the average absence rate in the past year? What portion of that absence has been due to illness of the employee? What portion has been due to illness of an employee’s family member? Will the new policy apply to family members as well as the employee?
Identify the information you want to have and then go get it. If it is not available for some reason, you may need to make some educated guesses about what it might have been if it were available.

Analyzing Data
Once you have the data you think you need, begin the sorting process to determine what will be helpful and what will not be helpful. Then test the data for accuracy. Do the best you can to determine whether there have been any data collection errors introduced to the process. Were there typos or transpositions? When the data is clean, then begin analyzing what it tells you.

Analyzing Best Practices
Having in hand an analysis of the data for your organization, the next step is to define what the best practices are for the issue being considered. What are other similar employers doing about the same issue? Who can you call (e-mail or text) that will be able to give you information about other employers handling of this issue? Once you have determined what other employers are doing, you will know what they consider best practice in the situation.

Delineating Best Practices
Compare the best practices identified by contacting other employers and researching industry data or through some other source. Determine what similarities exist in how other employers handle a situation. Then compare the way other employers handle a situation and what you would like to do in your organization.

Information sources can include the following:
- Your organizational history
- Industry data
- Specific data from one other company
- Peer-reviewed research
- Internet information available to the general public
- Response to survey requests sent to other employers
Combine all the input you can gather and construct a description of the best practices being followed by employers similar to you own.

Identifying Leading Indicators
Leading indicators provide evidence that HR is achieving its goal expectations. Human resource management has common measurement areas. Productivity, employee engagement, recruiting, retention, and budget are some of the key areas.
- Productivity Translated into dollars, employee productivity offers opportunity for significant savings in company expense. When one employee can produce more this year than last year, the budget will benefit.
- Engagement Results from employee surveys can indicate the state of morale and positive feelings about the employer. In turn, these factors can reduce turnover, improve attendance, and improve employee loyalty.
- Recruiting Perception of an employer’s reputation can impact people’s willingness to respond to recruiting efforts.
- Retention Employee turnover can represent a sizable amount of expense. Reducing that turnover, or increasing retention, can directly reduce costs.
- Budget Some executives see HR as an overhead expense. Achieving success in expense management is represented by the closeness HR can come to hitting budget targets.

Analyzing Large Quantities of Information
There are vast amounts of data that flow to the HR department each year. There are financial data, recruiting data, internal employee data, and training needs data, just to name a few. It is necessary for HR professionals to sort the important information from the less important. Data can drag the HR organization to a halt. Without prioritization and sorting, data as a total can be so overwhelming that it isn’t possible to deal with all of it. HR professionals must be able to determine which information should be acknowledged and which ignored.
One technique for dealing with large quantities of information is to only dip into that data in search of specific answers to specific questions. Systems can be developed to house data, permit retrieval by authorized individuals, and allow access to answers as questions arise. Protecting the data with security procedures can meet legal and philosophical obligations for privacy. But first, systems can permit data management that will prevent submerging the HR organization.
Once sorted and stored, HR has responsibility to analyze what the data says. What portions of the organization are experiencing the highest turnover rates? What departments have the lowest absence rates? What is the cost of each benefit program? What should be offered in the next round of union negotiations and why? Who has yet to be trained in sexual harassment prevention? Identifying the problem, defining it properly, and then seeking data to help analyze the potential solutions are the key roles in HR departments.

Proficiency Indicators for Senior HR Professionals

Evaluation done at the senior level of HR tends to focus more on the impact of policy and strategy. That evaluation can contribute to discussions held by executives about the positioning of the organization in its market, employee issues, and financial performance.

Maintaining Expert Knowledge
HR knowledge is constantly changing. There are new scientific studies being conducted each year and new laws enacted by federal, state, and local entities. It falls to the senior HR professional to know all of these things, keeping that knowledge current. It is often helpful to seek regular input from the legal staff and the accounting staff, for example. Knowing requirements and how they relate to organizational goals can help by identifying areas in which adjustments should be made.
Senior HR professionals must not only keep current in their knowledge but also be able to understand what that knowledge will mean to organizational objectives and how it will impact performance.

Interpreting Data and Make Recommendations
It is rather easy to identify the cost of benefit plans and suggest changes if costs warrant them. It may be a bit more difficult to interpret data about employee satisfaction and formulate recommendations for changes in policies or practices that might be appropriate.
The key question to ask is, “What impact will this data have on our organization?” Answering that question will then suggest what should be done to influence different outcomes. For example, monitoring recruiting efforts for veterans might tell you the goal for identifying sources of qualified people is not producing the results you hoped it would. The impact on your organization is that you will fall short of the target you set for hiring veterans. If you are a federal contractor, that can mean you would need to make adjustments in the use of recruiting sources. It could be necessary to find new sources of qualified veterans.

Making Decisions with Confidence
Decision-making has two components. One is the willingness to make decisions. The other is the quality of the decisions (or, do the decisions actually work)? Senior HR professionals are expected to be able to make decisions, often in the face of uncertainty. Not all the data will be available to guide you when you would like to have it. Sometimes, the quality of data you do have will be questionable. In the face of all the uncertainty, you are still expected to draw conclusions and make choices that will guide senior executives in your organization.
When policy changes are not an absolute requirement but an option, how will you formulate recommendations? Consider, for example, adding protections in your EEO and affirmative action policy that apply to LGBT. Aside from federal contractors, most other employers have the choice about including LGBT in their policy statement. The question is, should you? What will be the outcome if you do include that group among protected categories of people? What recommendation will you make to the senior executives? Likely you will not have all the data you would like to have about the impact of such a policy change. Yet you are still expected to make a professional determination about the question.

Setting the Direction of HR
Where is your HR organization going? What are its objectives? How should those objectives be redefined from year to year? To determine the answers, it is necessary to evaluate risks and economic and environmental factors.
Keeping a list of issues that will have an impact on your employer organization can help determine any adjustments in goals needed during the year. Economic impacts can come from change in benefit plan costs, increases in payroll expense, and increases or decreases in turnover rates. Environmental factors can include legislation, competition, compensation, and employee relations. Legislation impacts HR by imposing requirements such as records retention and compliance requirements, such as the Americans with Disabilities Act. Competition impacts can come from the effort to recruit the same type of talent found in competing organizations. Employee relations brings policy issues, early retirement programs, and different international expectations among the employee workforce. Compensation factors include the effort to maintain competitive positioning in the job market compared to other similar employer organizations.
How HR responds to each of these factors will determine how well it can meet its stated objectives. Altering the direction HR will take can result in the need to change its objectives.

Seeking Information
Obtaining information can be done strategically and systematically. Senior HR professionals are interested in gathering data that can help them run their HR organization, as well as data that can be shared with other executives.
Strategic data might include the results of employee attitude surveys. One strategy is to incorporate employee views into decisions about specific employment-related policies and programs. Knowing how employees feel about specific issues can provide guidance needed for decision-making about those policies and programs. Vacation policies, leave of absence practices, educational support programs, and telecommuting policies are all examples of issues that can benefit from employee input during the decision-making process.
Systematic data gathering can be done using routine systems such as direct employee accessing and updating of the HRIS records. Regular sampling of employee attitudes can be done automatically once the system has been set in place to generate questionnaires to a sampling of the workforce. Questionnaires can be modified as needed to test opinions about evolving issues.
Data is essential to decision-making. When there are routine visitations made to topics such as employee benefits, compensation, and performance appraisal systems, having data gathering processes in place to accumulate information needed makes those discussions easier. Informed decisions are better than those made in the dark.

Analyzing Information for Evaluation
Raw data might be interesting, but it is usually easier to use if it is summarized and transformed into statistics and charts. The number of hours employees are absent because of illness may be interesting, but it is more useful to look at it when it has been summarized into statistics such as absence rates. Displaying the relationship between two or more different data items means more when viewed over time.
Other examples of data that can be useful when evaluated over time can include anything that would permit trend plotting.

Median compensation paid to a given job category, average employee training hours per year, and percentage of employees still on the job 1 year after hiring are all examples of data relationships that can be plotted on a graph to represent trends over time, as shown in here.

Figure:      Sample data summary display with trend line

Sponsoring Process Improvement Initiatives
There is usually more than one way to accomplish a goal. The same can be said of most processes used in the workplace. You tend to use processes because they exist, not because they are the best. What exists and works pretty well takes no effort to change. If you want to make changes, you must invest effort.
Improving processes is not always encouraged precisely because it takes time and effort. It may also take other resources like budget dollars. For example, the recruiting links we have on our company web site are used by people interested in our job openings. If we wish to modify the process to include an invitation to self-identify disabled and veteran status during the application process (which is now required of all federal contractors), we must involve the people who actually write the code for these additional steps in the process.
HR can offer support or withhold support for such changes in processes having to do with employee data. Designing a new employee survey can take considerable time. Hiring an outside consulting firm to do that can cost considerable money. HR can decide to either support or oppose the creation of a new employee survey based on all the factors known at the time.
Sponsoring initiatives to improves processes is an HR opportunity to influence/improve the overall workings of company systems. These initiatives can be spontaneous from employee suggestions (“The handling of new employee orientation would be better if…”) or structured (from a study group assigned to assess and improve the performance evaluation process).

Communicating Impact for Data Analysis
Data has no value until it is communicated to those who can use it. Human resource professionals play a critical role in employer organizations because they have ownership of many data elements regarding employment activities. How HR people decide to pass along that data will determine the effectiveness of HR and the impact of the data.
For example, when it is determined that certain recruiting sources are more productive than others, helping the hiring managers understand where candidate riches are is a role HR can play. When HR explains to senior managers the cost of discrimination complaints, even though they are investigated internally and do not result in external agency complaints, it falls to the executive team to take any policy actions that HR recommends.

Building Effective and Creative Policies
When local, state, or federal legislation specifies how employees are to be treated, HR should craft policies that will ensure the organization is in compliance. When there is no legislation but regulatory rules specify the handling of employee issues, again HR professionals should guide their organizations to implement policies that will ensure compliance.
When managers are making decisions that treat similarly situated employees quite differently, it is time for HR to step in and create policies that can be recommended for standardizing that treatment when those conditions arise.
When no one seems to know how things should be done and the circumstances will likely recur, it should be no wonder that HR is expected to step in and create policies that will address those situations.

Using Environmental Factors in Decision-Making
Political, sociological, economic, technological, legal, and environmental are all factors that influence decision-making within employment organizations. Responsible business leaders look for ways to minimize the impact of their decisions on the environment. That means, for example, that energy consumption and energy sources come into play. Should the company invest in solar or wind power generation to offset carbon-based generation sources? Should systems be developed that will permit the recycling of water in the production of company products? If so, perhaps the overall use of “new” water can be reduced.
Customers are voting with their wallets these days. Organizations that consider the impact on environmental factors will win the race for consumer dollars when compared with sources or products and services that ignore such things.

Challenging Assumptions
Critical evaluation isn’t complete until you review your work and identify assumptions that have been made. What happens if you don’t check for assumptions? Well, here are some examples:
- IBM focused on mainframe sales in the 1980s while servers and PCs got more sales.
- Blockbuster held onto retail stores when streaming and DVD sales exploded.
- Nokia did not recognize smartphones as important but held onto standard cell phones.

The impacts of these oversights were serious financial penalties. In HR terms, it behooves you to keep track of the leading-edge trends or our competitors will be able to attract the talent that you would like to have. What are you doing for paid parental leave, employee lounge areas for rest breaks, or paid health care benefits that include dental and vision coverage? You can bet your competitors are considering all of these things as tools for recruiting and retaining tomorrow’s workforce.

Providing a Strategic View
“Critical analysis of the strategic management process focuses on the way managers develop strategies to achieve company goals. Since carrying out the strategy requires the support of the whole company, you have to evaluate how well you achieve such an acceptance of your strategy. You can build consensus by demonstrating to employees that the strategy looks after their interests, while motivating employees to look beyond their own interests to the well-being of the group as a whole. An example is profit-sharing, which rewards each team member but only to the extent that the team as a whole performs well.”

HR professionals provide critical input to strategic development and implementation of the strategic plan. Your problem analysis and decision-making are not complete until you evaluate how the decision will fit into the strategic plan.

Summary
All HR professionals will find it necessary to use these behaviors when performing their jobs. Looking past the obvious to what is actually driving people to do what they do is essential. Gathering data, assessing that data, and using the information to make quality decisions is something all HR professionals should be able to do. There is no more “shooting from the hip.” Conscious exploration of alternatives and impact now drive the modern HR function.